TMI Blog2004 (9) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... egister available with him, copies of returns filed with ST Department and copies of accounts received from traders, i.e., from creditors and debtors. The assessee filed return of income on 10th Jan., 1995, claiming total business loss of Rs. 9,53,660 inclusive of depreciation of Rs. 2,18,560. The AO calculated the GP at Rs. 4,29,500 and after considering depreciation of Rs. 2,09,163, estimated the loss at Rs. nil. In other words, the AO estimated the expenses of Rs. 2,20,417 excluding depreciation, whereas as per the assessee the expenses claimed were Rs. 3,68,682 (thereby making addition of Rs. 1,48,265). The AO did not also accept the claim of the assessee regarding the sales amount. The AO had taken the sales at Rs. 3,41,02,528, whereas as per the assessee the sales was at Rs. 3,36,50,728 (thereby making addition of Rs. 4,51,800). Further, the appellant had claimed the closing stock of Chana at factory at 1,721 quintal, whereas the AO had taken it as a Chana Dal at factory (thereby he had made addition of Rs. 3,44,200). After making all these additions of Rs. 9,44,265 (Rs. 1,48,265 + Rs. 4,51,800 + Rs. 3,44,200), allowed depreciation of Rs. 2,09,163. The learned CIT(A) has affi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,41,02,528, the closing stock which has to be reduced by Rs. 4,51,800, it will come down to Rs. 13,02,633 instead of Rs. 17,54,433. He submits that the AO thus made addition of Rs. 4,51,800 without any basis. The learned Authorised Representative refers page No. 12 of the paper book to make position more clear that, in other words, the AO added outside State stock worth Rs. 4,51,800 in the closing stock worth Rs. 17,54,433, thereby he had worked out the closing stock at Rs. 20,98,633 but he did not deduct the said outside State stock worth Rs. 4,51,800 from the sale of Rs. 3,41,02,528. Hence, the AO took the figure twice in calculation of the GP, which is an apparent error resulting in the addition. 6. Regarding addition of Rs. 3,44,200, the learned Authorised Representative submits that the AO had observed in his order that in the report submitted by authorised officer who concluded survey under s. 133A on 29th May, 1993, it has been mentioned that as per stock register maintained by the assessee, the details of opening stock of various commodities on 1st April, 1993, were as under: (1) Chana Nil (2) Chana Dal 1721.19 Qtls. (3) Chana Chhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative submits that return of income was filed late by the assessee because the books of account were not available with the assessee due to destruction of the same in the fire in the strong room of the Department and assessee had to collect information to file the return. Thus, the cause which resulted in filing the return delayed was beyond the power and control of the assessee and, therefore, the business loss should have been allowed to be carried forward despite the hardship of the provisions of s. 80 of the IT Act. He refers page No. 162 of the book Brooms Legal Maxims 10th Edn., by Herberts Broom, LL.D. , wherein under the Chapter Fundamental Legal Principles , the maxim Lex non cogit ad impossibillia. (Co. Litt. 231 b.) , i.e., the law does not compel a man to do that which he cannot possibly perform, has been discussed and concluded that it is a general rule which admits of ample practical illustration, that impotentia excusat legem; where the law creates a duty or charge, and the party is disabled to perform it, without any default in him, and has no remedy over there, the law will in general excuses him. Photocopies of the relevant page Nos. 162 and 163 of the said b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of all particular cases. There is also no dispute that provision laid down under s. 80 of the IT Act is a machinery provision and as per the judgment of Hon ble Supreme Court in the case of CIT vs. National Taj Traders, relied on by the learned Authorised Representative, rule of strict construction applies only to charging provision or one imposing penalty and not machinery provisions. We thus are of the definite view that there was sufficient reason beyond his power and control with the assessee for delay in filing the return and the law does not compel a man to do that which he cannot possibly perform. We find support from the ratio of decision of the Hon ble Supreme Court in the case of CIT vs. National Taj Traders, that rule of strict construction applies only to charging provision or one imposing penalty and not to the machinery provisions. We thus in the interest of justice find no reason to deny the claim of carry forward of loss of Rs. 7,35,100 of the assessee only on the basis that the return was filed late due to the reason which was admittedly a bona fide one beyond the power and control of both the parties. We thus respectfully following the principle laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1992) 20 ITC 145, wherein it was held that the unabsorbed depreciation cannot be strictly called a loss, as understood in commercial parlance, though under the statute, it assumes the nature of loss of business. Therefore, the unabsorbed depreciation can be said to be a specie of the large genus loss . Nonetheless, the distinct character or nature of the depreciation allowance holds out when unabsorbed depreciation allowance is carried forward along with unabsorbed development rebate or unabsorbed business loss in which case specific provisions are there regarding rule of priority in the matter of set off. 18. After considering the arguments advanced by the parties, in view of the materials available on the record, orders of the lower authorities as well as the decision cited by the parties, we do not find reason to interfere with the first appellate order on the matter. We also find support from the order of the Tribunal in the case of Vora Industries Tools (P) Ltd. vs. ITO, wherein it has been held that s. 32(2) itself is a self-contained provision for the carrying forward and set off of unabsorbed depreciation by virtue of deeming fiction of law and it is only subject to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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